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New Zealand dollar surges and gains 1.4 pct on sterling

The New Zealand dollar (Currency:NZD) is surging across the board, those who had been hoping for further declines in the NZD will be disappointed by today's market action:

  • The pound to New Zealand dollar exchange rate is 1.42 pct in the red at 1.9029.
  • The euro to New Zealand dollar exchange rate is 1.24 pct down at 1.6442.
  • The New Zealand dollar to US dollar exchange rate is 1.45 pct higher at 0.8050.

NB: These are spot market rates to which your bank will charge their own discretionary spread. However, an independent FX provider will guarantee to undercut your bank's offer, thereby delivering you more currency. Please learn more.

The threat now is that this sharp move higher by the NZD creates enough momentum for a longer-lasting uptrend to establish itself.

NZ Dollar gains are all thanks to the Reserve Bank of New Zealand

Shaun Osborne at TD Securities says the reason for today's NZ dollar surge rests with the country's central bank:

"The RBNZ kept rates steady, but added a more clear, albeit mild, hawkish stance to their statement.

"Taking a page from the Bank of Canada, the concept of eventually removing stimulus level rates was introduced. Even though they maintained their view that the NZD ‘remains high’, the more clear hawkish bias was enough to add a solid boost to the currency.

"The NZD is the top G10 performer by a long shot this morning.

best new zealand dollar exchange rates

"The RBNZ left the official cash rate unchanged at the record low of 2.5%, as widely expected. All eyes were on the Governor’s take on the NZD, but the stock phrase of “the NZD remains high” was swiftly ignored. Instead, attention focused on the introduction of “removal of monetary stimulus will likely be needed in the future” i.e. a clear tightening bias, even though the RBNZ repeated that it expects the OCR to remain unchanged through the rest of the year.

"The NZD wobbled then jumped 40 pips to $US0.7980 and 2yr IRS up +4bp on digesting the unexpected hawkish tone. No changes to our forecast (March 2014 first rate hike)."

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